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Performance Analysis of China Ethylene Plants by Measuring Malmquist Production Efficiency Based on an Improved Data Envelopment Analysis Cross-Model
journal contribution
posted on 2015-01-14, 00:00 authored by Yongming Han, Zhiqiang Geng, Xiangbai Gu, Zun WangData
envelopment analysis (DEA) has been widely used for efficiency
evaluation of industrial plants. A conventional DEA model may easily
lead to the situation where more than one-third of efficiency values
are set to 1, so it is hard to analyze the pros and cons of the multi-decision-making
units. The DEA cross-model can distinguish the pros and cons of the
effective decision-making units, but it is unable to indicate the
improvement direction of the ineffective decision-making units. This
paper proposes an efficiency analysis method based on an improved
DEA cross-model, which can get higher efficiency discrimination in
identifying the efficiency state of the decision-making units compared
with the conventional DEA model. The improved DEA cross-model avoids
the impacts of unreasonable weight allocation of input and output
indices. Meanwhile, self-evaluation of the improved DEA cross-model
with the slack variables can find the improvement direction of the
ineffective decision-making units. Also, the Malmquist productivity
index (MPI) based on the improved DEA cross-model can comprehensively
consider various input–output factors and obtain dynamic consistent
analysis performance of industrial plants. To get relative effectiveness
of ethylene plants under different technologies and different scales,
the performance analysis of 19 ethylene plants in China were executed
by proposed MPI. According to the results, various indices of MPI
are evaluated over time by the improved DEA cross-model to obtain
the root causes and direction of performance improvement of ethylene
plants. As a result, the method proposed in this paper is effective
and practical.